Mayor Bloomberg: ‘U.S. Can Borrow INFINITE Amount Of Money’

In this post, I share what New York Mayor Bloomberg said when he discussed the sequester on his weekly radio show.

But first, here are my thoughts: What he said about America’s financial well-being is similar to an entity being insolvent. What is disturbing is the belief that other productive countries will continue to finance America’s consumption indefinitely just because they have bought substantial US Government debt.

These countries may continue to finance America for the moment but only to play the fiat currency game to their advantage. For example, getting millions of their citizens above the poverty line and attracting foreign investments to create jobs for their people. But at some point when they are able to stand on their own feet and dictate terms, they will be ready to remove the burden of America’s excessive consumption. And.. there is something called cutting loss.

Bloomberg said ‘They can’t stop lending us money.’ It sounds like the world needs America’s consumption. This reminded me of this Peter Schiff story.

“We are spending money we don’t have… It’s not like your household. In your household, people are saying, ‘Oh, you can’t spend money you don’t have.’ That is true for your household because nobody is going to lend you an infinite amount of money. When it comes to the United States federal government, people do seem willing to lend us an infinite amount of money…”

“When you are a small country, it’s questionable. So countries like the European countries, they do have to balance their budget. They really can’t get away with what America can get away with. America can get away with it for a long time.

“Our debt is so big and so many people own it that it’s preposterous to think that they would stop selling us more. It’s the old story: If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that’s a problem for the lenders. They can’t stop lending us more money.”